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Taxation — Income tax — Tax avoidance

(0:00:10) Reasons for Judgment: Rowe J. (Wagner C.J. and Karakatsanis, Martin, Kasirer, Jamal and O’Bonsawin JJ. concurring)
(0:00:20) I. Overview – 1
(0:05:48) II. Facts – 7
(0:17:32) III. Judicial History – 26
(0:17:34) A. Tax Court of Canada, 2019 TCC 76, [2019] 4 C.T.C. 2001 – 26
(0:23:34) B. Federal Court of Appeal, 2021 FCA 160, 460 D.L.R. (4th) 731 – 34
(0:26:30) IV. Issues – 39
(0:26:55) V. Analysis – 40
(0:26:58) A. Background to the General Anti-Avoidance Rule – 40
(0:30:43) B. The Relationship Between the GAAR, the Duke of Westminster Principle and Uncertainty – 46
(0:34:28) C. Applying the GAAR – 51
(0:35:33) (1) Tax Benefit – 53
(0:36:05) (2) Avoidance Transaction – 54
(0:37:13) (3) Abusive Tax Avoidance – 56
(0:38:02) (a) The Object, Spirit and Purpose Reflects the Rationale of the Provision – 58
(0:40:30) (b) The Provision’s Text, Context and Purpose Are Used to Determine Its Rationale – 62
(0:45:06) (c) The Abuse Analysis Focuses on Whether the Result of the Transactions Frustrates the Provision’s Object, Spirit and Purpose – 69
(0:49:01) (d) Summary – 73
(0:50:09) VI. Application – 75
(0:50:11) A. Which Provisions Are at Issue? – 75
(0:52:11) B. What Is the Object, Spirit and Purpose of Section 111(5)? – 78
(0:53:14) (1) The Text of the Provision – 79
(0:57:43) (2) The Context of the Provision – 84
(0:58:03) (a) Section 111(5) Should Be Considered Against the Foundational Principles of the Act – 85
(0:59:06) (b) Section 111(5) Delineates the Boundaries of the Benefit-Conferring Provision, Section 111(1)(a) – 86
(1:02:06) (c) Parliament’s Selection of Control Tests Differs Across the Act – 91
(1:05:44) (d) The Control Test in Section 111(5) Is Expanded and Restricted by Other “Deeming” Provisions – 96
(1:08:49) (3) The Purpose of the Provision – 100
(1:19:46) (4) Conclusion on Object, Spirit and Purpose – 113
(1:25:56) C. Was There an Abuse of Section 111(5)? – 121
(1:40:56) VII. Conclusion – 141

(1:41:06) Dissenting Reasons: Côté J.
(1:41:11) I. Overview – 142
(1:44:10) II. Analysis – 146
(1:44:12) A. The GAAR Cannot Override Parliament’s Intent – 146
(1:52:58) B. The Text, Context and Purpose of Section 111(5) – 157
(1:55:12) (1) The Notion of De Jure Control – 160
(1:59:06) (2) The Binary Nature of Control: De Jure and De Facto Control – 165
(2:04:05) (3) Conclusion on the Object, Spirit and Purpose of Section 111(5) – 171
(2:10:24) C. Abuse Analysis – 180
(2:10:26) (1) Standard of Review – 180
(2:12:01) (2) The Avoidance Transactions Do Not Amount to an Abuse of Section 111(5)’s Object, Spirit and Purpose – 183